What’s the sticker price in the operating room?

How is a hernia operation like buying a new car?

Most people might say it’s not.

However, as consumers, most people know car dealers charge different amounts for the same vehicle. But they may not know the price of a surgery at one hospital can be several times more than what another charges.

WFAA-TV News 8 spent a week analyzing what 70-year-old Autry Terry of Cedar Hill, Texas, got billed for a surgery, who paid what for the services, and what he finally paid.

He went into Texas General Hospital in Grand Prairie In December for what he expected to be a hernia operation. Last week he got a bill. The top line said it cost $186,217.

“I think it’s a pure ripoff,” Mr. Terry told news 8.

The bottom line of the bill, however, said he owed about $1,692 for the operation.

What happened between the top line of the bill and the bottom line, invisible to the patient, shows not only the complexity of hospital billing but the differences in what hospitals charge for the same procedure. A lot of people may know more about what they spend for their car than they do for their surgery, which can be a lot more.

After receiving legal consent from Mr. Terry to discuss his bill with us, a team from Texas General described how what appears to be a huge bill turns out to be not so huge.

“It’s actually very complicated,” Texas General Hospital administrator Joan White-Wagoner told News 8. “We have one fee schedule (called the charge master) that comprises all of the charges for Mr. Terry’s surgery.”

It is one-and-a-half pages long and contains scores of items for services, supplies and equipment.

Patients at most hospitals don’t get such a list with their hospital bill unless they specifically ask for it, or unless their insurance provider sends them one.

“We have to individually negotiate every time we provide a service to a patient,” said Ms. White-Wagoner.

In Mr. Terry’s case, $184,00 of the bill dissolved in the negotiation process. Bottom line, the whole bill was $186,000. Medicare paid about a total of about $4,000 for the operation, a fee which the hospital negotiates with Medicare. $180,000 in charges fell by the wayside. And Mr. Terry was left with a bill of about $1,700.

Texas General says it has a financial aid package that could ultimately reduce Mr. Terry’s out-of-pocket expenses to a total of about $50, Ms. White-Wagoner says.

“We never send people to collections. A patient’s ability to pay will never impede the quality or the care that we provide,” she told News 8.

“The average person doesn’t know any better,” when it comes to health care billing, David Toomey told News 8.

“It hurts! That’s all. I need help. So fix me!” he said. Toomey is president of Compass Professional Health Services, a company that helps employees and employers navigate the health care system.

Toomey’s message: All healthcare is not alike, in cost, quality or patient satisfaction.

“On the hospital side of the equation, there’s nothing called reasonable and customary,” Toomey said.

Hospitals, News 8 discovered, charge different prices for the same operation, just as car dealers do with cars.

Take Mr. Terry’s case. He was supposed to have a laproscopic hernia.

The “sticker price” for Mr. Terry’s surgery generated from Texas General’s fee schedule (the charge master) was $186,217.

But nobody likes to pay sticker price, especially insurance companies. They make deals on what they will pay to different hospitals and hospital groups. In North Texas the prices negotiated by private insurance companies for a surgery like Mr. Terry’s range from a high of $17,000 to a low of about $4000, according to industry data. These negotiated deals are called “in-network” prices.

Medicare is insurance, too. It is health insurance for older Americans through the federal government. Medicare sets a price of what it will pay for a laproscopic hernia like Mr. Terry’s. In Dallas, Medicare pays about $6100 for the procedure, according to the Centers for Medicare and Medicaid.

So the prices work out like this.

That’s a difference of $180,000 for the same operation.

“So if you’re paying retail, there’s wide price variation about what a provider that’s that’s not in anybody’s network wants to charge or can charge,” said David Toomey.

Much of the time, public or private insurance shields patients from costs. And patients see no need to investigate their bills. Patients without that shield, or the foreknowledge of the billing process, can suffer. In this case, being armed with knowledge of what your bill will be, is power.

Via KHOU